Train, tram operators to get billions

By Clay Lucas

VICTORIAN taxpayers will pay about $9 billion in the next eight years to two private operators to run Melbourne's trams and trains, with lighter penalties if they fail to run on time.

Connex's name will be removed from trains and the system renamed ''Metro''. The massive Government rebranding exercise will cost $25 million.

The city's new train operator is led by MTR, majority-owned by the Hong Kong government. Its chief, Andrew Lezala, pledged yesterday to cut cancellations by a third.

Staff will be returned to the rail system under the new contracts, with 22 more of the city's 211 train stations to be staffed. Just 75 stations are now staffed from first train to last.

Metro has pledged to spend $2.5 million redeveloping Caulfield station, and to spend $5 million more each year on removing graffiti. Crucially, it also agreed to upgrade the air-conditioners in the city's ageing fleet of 92 Comeng trains so that they can run in temperatures up to 45 degrees. Many failed this summer, leading to mass cancellations in January and February.

The three firms behind Metro have predicted it will bring in revenue each year of about $800 million for the next eight years, from Government subsidies, ticket sales and other sources, such as construction.

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By comparison, Connex brought in revenue of $645 million last year.

The tram system will retain the name Yarra Trams - but $10 million will be spent on re-badging.

Also staying indefinitely will be 33 ageing Z-class trams, introduced between 1975 and 1979. They will get a $9 million refurbishment, Public Transport Minister Lynne Kosky said yesterday.

And 37 vintage W-class trams will be retained , down from the unmet promise to run 53 of the trams. No phase-out dates for the remaining W-class trams has been set.

The new tram operator will spend $5 million cleaning and repairing trams.

Premier John Brumby said the new operators would bring significant improvements for travellers.

The Government has not yet released the voluminous contracts signed with the new operators, as it pledged to do in June when they were named preferred tenderers.

Mr Brumby said this was ''normal because they haven't started yet. There is material in there that is commercial in confidence''. He said the contracts would be released on November 30.

Connex was fined $32 million last year, while Yarra Trams was fined $6.2 million. Under the new contracts, the train operator can be fined a maximum of $12 million, and the tram operator $6 million.

The new operator behind Yarra Trams, a consortium named KDR, yesterday told the Australian Securities Exchange it expected to earn revenue of $2.8 billion from the eight-year contract - almost $1 billion more than financial analysts JP Morgan had this year predicted the contract would be worth.

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The consortium behind Metro expects, according to analysis of two postings to the ASX yesterday, to earn revenue of $6.5 billion in the next eight years.

Opposition transport spokesman Terry Mulder said it did not matter who ran Melbourne's rundown train system. ''They are going to inherit a rail network that has not been maintained, and they are going to inherit old trains that don't have air-conditioning. A coat of paint and a change of name will not fix that,'' he said.